U.S. stock indexes falter as Wall Street frets about economy

KateGibson

NEW YORK (MarketWatch) -- U.S. stocks fell sharply Monday, adding to losses for August so far, as investors worried about the economy at the start of a data-riddled week, which culminates with the monthly employment report.

"The problem is Friday's unemployment number, and investors may be staying on the sidelines concerned about it," said Howard Silverblatt, senior index analyst at Standard & Poor's.

'No jobs, no recovery.'
Howard Silverblatt, S&amp;P

"Those monthly numbers are important. Whether we're looking at housing, durable goods or anything else, it still comes down to jobs -- no jobs, no recovery," Silverblatt said.

The Dow Jones Industrial Average
DJIA, +0.37%
fell 140.92 points, or 1.4%, to end at 10,009.73, near session lows.

The Dow is currently off 4.4% for August, with only one trading session left in the month.

"The market is having a bit of a temper tantrum, saying businesses should step up and start hiring people or we need one more shot of stimulus," said Burt White, chief investment officer at LPL Financial.

All but one of the Dow's 30 components traded lower. Intel Corp.
INTC, +0.23%
dropped 2.2% after the world's largest computer-chip manufacturer said it would pay about $1.4 billion to acquire Infineon Technologies AG's wireless unit. Read about Intel's deal.

The spate of M&A "illustrates companies are flush with money and willing to use it, and valuations are relatively cheap," said White, who added that buyout premiums being offered are relatively modest, showing "companies are nervous and not willing to overspend."

And, "investors are thinking, if companies are not going to overbuy here, maybe I shouldn't either," he added.

The S&P 500 Index
SPX, +0.18%
declined 15.67 points, or 1.5%, to end at 1,048.92, with financials leading losses that included all 10 of the index's industry groups, with regional banks KeyCorp
KEY, +1.32%
and First Horizon National Corp.
FHN, +1.85%
both down around 4%.

For every stock on the rise, nearly four fell on the New York Stock Exchange, where 818 million shares traded.

Earlier Monday, the Commerce Department reported that personal spending climbed 0.4% in July, the largest rise in four months, while personal income gained 0.2% on the month. Read more about the latest economic data.

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